California’s Benefit…

Friday, April 2, 2010

* Californians Thank Their Congressional Representatives for Health Reform
* Federal Health Reform “Reconciliation” Package Signed Into Law Earlier This Week
* Health Reform Would Significantly Benefit California and Californians

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Up and down the state, Californians this week have been meeting legislators at airports as they arrive home from Washington, DC, visiting Congressional offices, and attending town halls, all to thank their Representatives for voting for and passing health reform.

From Speaker Nancy Pelosi in San Francisco to Rep. Doris Matsui in Sacramento, Congressional leaders are in turn reaching out to their constituents to tell them about the significant benefits of health reform for their districts and the state of California. As our state has one of the highest rates of uninsured, low-wage families who need help to afford coverage, workers who don’t get coverage on the job, and people denied for pre-existing conditions, Californians would especially benefit from this health reform that directly addresses these issues.

On Tuesday, President Obama signed a “reconciliation” package of improvements to the base health reform proposal he approved last week. That package improved the measure for California, increasing aid to the state budget of California and improving subsidies for low- and moderate-income families to afford coverage in this high cost-of-living state.

From the House Energy and Commerce Committee and other sources, here’s some analysis of the benefits of the health reform bill to California:

The law prevents the worst abuses of the insurance industry, installing consumer protections that will provide more security to all Californians. It also provide specific help to many Californians. Health reform will:
* Extend health coverage to 3.8 million uninsured Californians and improve coverage for 21 million Californians with employer-based or individual health insurance, ultimately extending coverage to 94% of the population.
* Guarantee that 800,000 Californians with pre-existing conditions can obtain coverage.
* Protect 66,000 California families from bankruptcy due to unaffordable health care costs.
* Allow 3.2 million young adults in California to obtain coverage on their parents’ insurance plans.

Over the next ten years, the state and its residents will receive new federal support for health care worth approximately $124 billion. In California, the law will:
* Provide families with tax credits to purchase health care coverage and other federal health care benefits worth $106 billion.
* Provide small businesses with $4.3 million worth of health care tax credits.
* Fill the donut hole, saving seniors $9.3 billion in drug costs.
* Provide $1.4 billion in new funding to community health centers.
* Reduce uncompensated care costs for California health care providers by $2.6 billion.

**Affordability Assistance Through Middle Class Tax Credits and Medi-Cal

California residents that do not receive health care coverage through their employer will be able to purchase coverage at group rates through the new health insurance exchange.

To make this insurance affordable, the new health care reform law provides middle class families with incomes up to $88,000 for a family of four with tax credits to help pay for coverage in the exchange, so that coverage is not more than a certain (sliding scale) percentage of income.

For a family of four making $50,000, the average tax credit will be approximately $5,800. There are 7.2 million households in California that could qualify for these credits if they purchase health insurance through the exchange or, in the case of households with incomes below 133% of poverty, receive coverage through Medi-Cal. These families will receive $106 billion in tax credits and other federal health care assistance over the next decade.

** Support for Small Business to Help Purchase Coverage for Their Workers

Small businesses with 25 employees or less and average wages of less than $50,000 will qualify for tax credits of up to 50% of the costs of providing health insurance. There are approximately 775,000 small businesses in California that could qualify for tax credits for providing coverage. These businesses will receive $4.6 billion in tax cuts over the next decade.

** Help for Seniors Who Now See a Part D Donut Hole in Their Drug Coverage

There are 465,000 California seniors who have their Medicare Part D prescription drug coverage “run out” each year, dealing with a “donut hole” in their coverage. Under the new law, these beneficiaries will receive a $250 rebate in 2010, 50% discounts on brand name drugs beginning in 2011, and complete closure of the donut hole within a decade. A typical beneficiary who enters the donut hole will see savings of over $700 in 2011 and over $3,000 by 2020. Over the next decade, seniors in California who hit the donut hole will save a total of $9.3 billion.

** New Funds for Community Health Centers

There are almost 1,100 community health centers in California that provide health care to the poor and medically underserved. Nationwide, the legislation would provide $11 billion in new funding for these centers. If the community health centers in the state receive the average level of support, the 1,100 centers will receive $1.4 billion in new assistance.

** Reducing the Cost of Uncompensated Care

California hospitals and health providers incur billions of dollars in uncompensated costs for providing health care for individuals without health insurance or with inadequate insurance. By providing quality, affordable health care coverage for almost every American, the new health care reform law will reduce the costs of uncompensated care for California health care providers by $2.6 billion over the next decade.

For more information, visit the Health Access California website, at, A quick one-page factsheet on the benefit of the health reform bill to Californians is available on the website, at:

Health Access California promotes quality, affordable health care for all Californians.

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